U.S. capital gains rate for securities

Hi there,

What's the current U.S. long term capital gains rate for stocks? When I left I believe it was 20%, but I've heard rumours it was lowered slightly?

Thanks,

It's now 15% for most items, but collectables such as fine art are 28% and the tax on depreciation claimed previously on real estate is 25%.

Depending on what you think will happen in the mid-terms, you might want to start selling now just in case tax rates go up next year to pay off some of the Federal defecit...

Ooo, Guya, you're just a bundle of joy today.  Yeah, SunKing, you'd better sell everything today in case you don't live to be 90 and don't get a chance to enjoy your money before you die.

Seriously, there's only so much advance planning anyone can do.  As one of our illustrious leaders recently said, There are known unknowns and unknown unknowns.  We don't know which side will win.  Bush may have a low rating right now, but I've seen dozens of ads last night (I just arrived yesterday into the US) and the TV network news is making it look rather different than the Economist does. 

Whatever happens at the election booths next week, It's clear that if the Republicans retain a majority, they aren't likely to raise taxes; it's also clear that if the Democrats regain House or Senate (or both), they can introduce as much tax-raising legislation as they want but they still have to contend with Bush's veto powers.

Under the current laws, however, the 15% rate will eventually expire.  I'm not in the office this week, I'm sure you (Guya) can tell us when they are set to return to 20%.

Thanks Lizzit. What's the short-term capital gains rate actually? Today I sold a stock I've owned for only 5 months!

Thanks

The rate is the top end of your marginal rate.  That is, if you're in the 28% bracket, it's 28%; if you're in the 15% bracket, it's 15%, and if you're in the 35% bracket, it's 35%.

Don't forget that if you choose to bring the proceeds to the UK that you could face tax at the 40% rate...

The rate is the top end of your marginal rate.  That is, if you're in the 28% bracket, it's 28%; if you're in the 15% bracket, it's 15%, and if you're in the 35% bracket, it's 35%.

"Oh crumbs", to quote a British colleague of mine. If I am making a £54,000 salary in the UK, with no income in the U.S. other than a small amount of stock dividends and the handful of capital gains, should I assume the 35% bracket?

Many Thanks

MFJ & HOH - 25%
MFS - 33%
Single - 28%

Don't know if you're single or married or kids or what. 

I agree with Lizzit that if filing single then I'd also estimate 33% (following the stacking rule introduced for the foreign earned income exclusion from 2006). (My estimate would have been close to zero in 2005 so you can see what a difference this years tax changes have made.)

Thanks, I'm unmarried. Taxes will be fun for 2006- 11.25 months of income in the UK, capital gains from profitable stocks in the U.S., and 0.75 months of income in Germany. 

Many thanks for all your help. I don't suppose you know of a tax forum that's this good for Germany?   

Lizzit- If you've moved back to the U.S., you would probably enjoy reading the book "A Stranger In My Own Country" by Bill Bryson